Tuesday, May 08, 2012

Department raps InterOil for not complying with laws

Department of Petroleum and Energy (DPE) yesterday (Monday) blunty accused InterOil of not complying with the Oil and Gas Act, The National reports. This follows last week’s announcement by Interoil that it had entered into a binding farm-in agreement with a Peru-based company, Pacific Rubiales Energy (PRE) for PRE to take a 10% net equity interest at an estimated cost of US$345 million in petroleum prospecting license (PPL) 237.
Department Secretary Rendle Rimua said yesterday (Monday) that this arrangement did not include any equity interest transfer in the Elk/Antelope fields which were also partly in PPL 237.
“The 10% stake only relates to the Tricerotops 2 well and associated exploration activities,” he said.
“The Department of Petroleum and Energy is very concerned that Interoil has released information publicly on the transfer of the equity interest without approval from the Minister for Petroleum and Energy (William Duma).
“The Department has also yet to receive any formal request from Interoil requesting the Minister to approve the transfer.
“We have also noted some oil companies releasing public statements on licence transfers and we remind the industry that no licence can be transferred until it is approved by the minister; hence Interoil or any other company involved in transfers and dealings must seek approval of the minister before releasing any information in relation to any equity interest transfers in their licences.
“The department is concerned that such practices are pre-empting the decision of the minister and could also be interpreted as undermining the laws of the country.
“While we encourage investment in the oil and gas sector, the department advises investors to respect the laws of the country.
“If investors do not respect our laws, we will not tolerate such attitude.
“The department has a due diligence process to review; compliance, contract terms and conditions, price and conditions (if any) to be set in any instrument to legitimise transfer of equity interest in a licence.
“In view of this, it is very important oil and gas companies do not release public statements until they receive approval from the Minister.
Rimua said last year the National Executive Council (NEC) rejected the Gulf LNG Project primarily because Liquid Niugini Gas Ltd (LNGL)/Interoil were deviating from the project concept that was agreed to between the state and LNGL/Interoil in the 2009 project agreement.
"Recently, Interoil came out public stating that front end engineering and design (FEED) was still in progress and the government had not rejected the Gulf LNG Project concept,” he said.
“This is factually misleading.
“The department is also amazed that LNGL/Interoil states that the Gulf LNG project has not been rejected even when the Minister for Petroleum and Energy publicly stated on various occasions that it was rejected by the NEC.”

1 comment:

  1. Anonymous1:28 AM

    Well, some O&G companies are trying to help out PNG. Like all ordinary businesses in the modern world, they tend to take initiatives and make agreements subject to government approval. Unfortunately, trying to get in contact with the DPE is proving to be very difficult for anyone, unless you offer real estate prospects in Australia.